Visa abandoned its $5.3 billion planned acquisition of Plaid, an important competitor in the financial-technology space, in the face of a Justice Department antitrust lawsuit.
Value’s outperformance can continue for now, argued the Citigroup strategists in a Tuesday note. They expect investors to continue rotating out of growth stocks and into value stocks. In the near term, “growth remains the most crowded factor,” they wrote, so “the rotation around growth versus value continues.” They also noted that there are plenty of value stocks among the ranks of the crowded and less-crowded investments.
The Citi analysts created a score for each stock to reflect how much of the stock is held by institutional funds and how many funds own it, as well as “crowding” metrics; crowded stocks have low short interest and relatively high earnings multiples. The more crowded a stock, the more likely it is to drop soon, they argue. The less crowded, the more likely it is to pop.
The coronavirus pandemic is placing enormous budget pressure on state and local governments, threatening deep and potentially lasting cuts to education, infrastructure, and other important investments.